HJ 

A3 
1911 


UC-NRLF 


$B  toa  ma 


'•ay       >. -^:.^^%r~ 


h'  »' 


GIFT 


STATEMENT 


SECRETARY   TO   THE    PRESIDENT 


CONCERNING 


The  President's  Inquiry  in  re  Economy 
and  Efficiency 


BEFORE  THE 


Subcommittee  of  House  Committee  on  Appropriations  in 
charge  of  Sundry  Civil  Appropriation  Bill  for  19 12 


FEBRUARY  6,  191 1 


WASHINGTON 

GOVERNMENT   PRINTING   OFFICE 

1911 


^ 


tin 


cA 


>^o 


THE  PRESIDENT'S  INQUIRY  INTO  ECONOMY  AND 
EFFICIENCY. 

STATEMENT  OF  MR.  CHARLES  D.  NORTON,  SECRETARY  TO 
THE  PRESIDENT,  ACCOMPANIED  BY  MR.  F.  A.  CLEVELAND, 
EXPERT  IN  CHARGE. 

The  Chairman.  Mr.  Norton,  at  the  last  session  of  Congress  there 
was  an  appropriation  made  to  enable  the  President,  by  the  employ- 
ment of  accountants  and  experts,  to  more  effectively  inquire  into  the 
methods  of  transacting  the  public  business  of  the  Government  in  the 
several  executive  departments  and  other  Government  establishments, 
with  a  view  to  inaugurating  new  or  changing  old  methods  of  trans- 
acting such  public  business  so  as  to  attain  greater  efficiency  and 
economy  in  the  administration  of  our  public  affairs.  The  appropria- 
tion made  was  $100,000  and  you  estimate  for  the  next  two  fiscal  years 
$100,000. 

First,  let  me  ask  you  what  amount  has  been  expended  from  the 
appropriation  made  for  the  current  fiscal  year  ? 

Mr.  Norton.  Less  than  $10,000  of  the  $100,000  has  been  ex- 
pended. 

The  Chairman.  Is  the  investigation  now  going  on  as  authorized 
in  this  paragraph  ? 

Mr.  Norton.  It  is  in  hand.  The  appropriation  was  made  effective 
July  1,  at  a  time  when  the  executive  offices  were  away  from  Wash- 
ington and  nothing  was  done  to  cause  any  large  expenditure  of 
money  during  the  summer.  We  made  a  careful  study  of  plans  for 
conducting  the  inquiry  and  of  men  available  to  do  the  worK  during 
the  summer,  interviewed  a  great  many  men,  looked  into  their  capacity 
for  this  work,  but  did  not  organize  our  staff  until  returning  to  Wash- 
ington in  the  fall.     We  have  been  at  it  since  that  time. 

The  expenditures  up  to  the  present  moment  have  not  been  large. 
We  have  kept  them  down  to  the  lowest  possible  sum,  and  in  our 
preliminary  inquiries  we  have  been  able  to  use  the  forces  in  the 
departments  to  advantage.  We  have  asked  the  departments  for 
certain  information  as  a  basis  for  the  judgment  which  will  be  formed 
and  acted  upon  later.  This  entailed  a  very  great  amount  of  work 
on  the  departments  but  the  information  has  been  cheerfully  furnished. 

For  the  purpose  of  assisting  in  carrying  on  the  inquiry,  and  enlisting 
the  cooperation  of  the  men  in  the  service,  the  head  of  each  depart- 
ment and  independent  establishment  was  asked  by  the  President  to 
appoint  a  committee  on  economy  and  efficiency.  All  of  these  com- 
mittees, altogether  perhaps  50  men,  were  called  together  at  The 
White  House  at  the  start  and  the  President  explained  to  them  what 
his  plans  were  and  what  he  expected  of  them.  The  head  of  each 
department  has  been  given  a  series  of  requests  for  •  information. 
These  requests  have  covered  the  subjects  of  (1)  powers,  duties,  and 

(3) 


limitations  of  each  bureau  and  division  as  a  means  of  understanding 
just  what  were  the  problems  before  each  department;  (2)  organiza- 
tion and  equipment  for  exercising  tlie  powers  and  performing  the 
duties;  '^3)  methods  employed  in  conducting  business;  (4)  records 
kept,  where  and  by  whom;  (5)  kinds  of  documents  used  as  evidence 
of  t,r&,ii3»ct.ioiis;  (6;  methods  and  procedure  of  audit;  (7)  methods 
of  handling  and  filing  correspondence;  (8)  methods  of  preparing  and 
submitting  estimates  and  the  kind  of  records  supporting  estimates 
for  appropriations,  etc. 

These  inquiries  were  formulated  in  our  office. 

The  Chairman.  The  office  of  the  President  ? 

Mr.  Norton.  Yes,  sir;  the  office  of  the  President,  and,  the  Presi- 
dent having  assigned  the  matter  to  me,  I  in  turn  employed  Mr. 
Cleveland  to  have  general  charge  of  the  inquiry  under  my  direction. 

The  Chairman.  How  many  people  are  employed  and  paid  from 
this  appropriation  at  the  present  time  ? 

Mr.  Norton.  Eleven  people  are  paid  out  of  this  appropriation. 

The  Chairman.  None  of  those  paid  from  the  appropriation  is  on 
the  pay  roll  of  the  Government  in  any  other  department  ? 

Mr.  Norton.  No,  sir.  Of  course,  this  force  wall  be  largely  increased 
as  the  work  progresses.  A  large  part  of  the  material  called  for  from 
the  departments  is  now  in.  As  it  has  been  received  it  has  been 
digested  and  made  available  to  the  committees  for  critical  consider- 
ation and  constructive  recommendations. 

The  Chairman.  What  has  been  the  line  of  investigation  thus  far, 
in  a  general  way. 

Mr.  Norton.  The  first  thing  we  took  up  for  detail  analysis  was  the 
question  of  the  estimates  of  the  departments,  the  way  in  which  they 
are  made  up  and  the  way  in  which  they  are  submitted  to  the  com- 
mittees of  Congress. 

The  Chairman.  The  estimates  for  appropriations  ? 

IVIr.  Norton.  Yes,  sir;  with  a  view  to  enabling  the  President  to 
know,  first  of  all,  those  objects  for  which  money  is  expended,  in  order 
that  he  may  later  form  a  judgment  as  to  whether  it  is  expended 
economically.  We  have  recast  the  estimates  of  appropriations,  bas- 
ing our  work  upon  a  new  classification  of  objects  of  governmental 
expenditure.  This  classification  contains  main  headings  running 
from  A  to  Z,  and  some  of  these  main  headings  are  further  subdivided, 
so  that  there  are  in  all  35  to  40  items. 

The  Chairman.  Are  you  using  Greek  symbols  and  other  symbols 
for  the  purpose  of  indicating  items  when  the  alphabet  is  not  large 
enough  ? 

Mr.  Norton.  We  are  not. 

The  Chairman.  Of  what  advantage  are  these  symbols? 

Mr.  Norton.  They  enable  one  to  state  definitely  a  class  of  expend- 
itures by  a  shorthand  method  and  at  the  same  time  to  indicate  the 
larger  classes  or  groups  to  which  such  class  belongs.  Thus,  it  might 
take  a  long  phrase  to  explain  exactly  what  is  included  in  a  class  of 
expenditures  which  appears  on  a  summary  or  estimate. 

By  having  a  symbol,  the  class,  and  its  relation  to  other  classes,  can 
be  accurately  and  fully  determined  by  referring  to  the  code  catalogue. 
The  exact  meaning  of  each  class,  subclass,  or  subdivision  may  thus  be 
definitely  known  to  everyone  who  has  anything  to  do  with  the  subject. 

Take  travehng  expenses  as  an  example  (Class  B).  We  find  that  the 
travefing  expenses  of  the  Government  last  year  amounted  to  a  certain 


large  sum.  Now,  having  ascertained  that  fact,  we  can  go  below  and 
find  out  the  cost  of  travel  in  each  department.  For  instance,  we  find 
that  in  the  Department  of  Agriculture  the  traveling  expenses  were 
approximately  $1,300,000.  Following  down  the  subdivisions  of  our 
classification  under  this  heading  of  traveling  expenses,  we  can  deter- 
mine the  exact  way  in  which  the  expense  was  incurred  and  the  par- 
ticular unit  of  governmental  organization  in  the  work  in  which  it 
arose.  We  can  also  find  out  the  exact  amount  paid  for  first-class 
single-trip  tickets,  second-class  single-trip  tickets,  third-class  single- 
trip  tickets,  mileage,  etc. — in  fact,  we  can  get  down  to  the  thing  bought 
and  the  price  paid,  if  this  information  is  desired.  When  looking  at 
any  total  or  summary  it  will  be  known  exactly  what  is  included  so 
that  there  will  be  no  confusion  of  thinking  about  the  subject.  After 
determining  on  these  main  classes,  they  were  applied  to  the  estimates 
of  1912. 

The  Chairman.  Have  you  also  ascertained  that  the  Agricultural 
Department  has  recommended  and  the  Committee  on  Agriculture  has 
carried  in  the  agricultural  appropriation  bill  a  provision  to  repeal  the 
law  which  requires  the  Agricultural  and  other  departments  to  report 
to  Congress  all  travel,  giving  the  names  of  the  persons  who  travel  out- 
side of  those  who  are  in  the  field  service,  the  amount  expended,  and 
the  business  on  which  they  travel  ?  Are  you  aware  that  such  a  rec- 
ommendation was  made  for  the  repeal  of  that  law  ? 

Mr.  Norton.  No,  sir. 

The  Chairman.  That  is  in  the  agricultural  appropriation  bill. 

Mr.  Norton.  After  such  an  analysis  of  expenditures  has  been  made 
and  reported  in  summary  form,  supported  by  such  detail  regarding  the 
subject  as  may  be  desired,  the  question  can  be  taken  up  by  the  Presi- 
dent or  head  of  department.  First,  as  to  whether  that  travel  was 
necessary,  and,  second,  as  to  whether  the  transportation  was  bought 
as  cheaply  as  possible.  That  is  the  object  of  the  classification  of  trav- 
eling expenses  under  one  head.  We  are  making  up  a  list  of  the  objects 
for  whicn  the  Government  spends  money.  It  is  an  immense  task,  but 
it  is  nearly  completed.  It  is  codified  for  convenience  and  classified  by 
numbers  in  such  a  way  that  a  certain  letter  means  travel  and  a  certain 
number  means  first-class  single-trip  railroad  tickets,  etc.;  another 
number  means  the  Agricultural  Department.  For  instance,  any 
number  beginning  with  "  1 "  means  expenses  in  the  Department  of 
State  and  any  number  beginning  with  ''2"  means  expenses  in  the 
Department  of  Treasury.     The  Department  of  Agriculture  is  "8". 

Mr.  Fitzgerald.  Is  this  scheme  for  the  information  of  the  Presi- 
dent, or  is  it  contemplated  that  a  plan  will  be  recommended  to  Con- 
gress by  which  all  the  items  for  the  Treasury  Department  shall  be 
appropriated  in  one  item  ? 

Mr.  Norton.  We  have  not  reached  any  conclusion  on  that  subject. 
I  might  say,  in  general  terms,  that  the  aim  of  the  inquiry  is  to  display 
the  Government  business  so  that  it  can  be  thought  about  intelligently 
by  the  men  in  charge  and  who  are  responsible  for  it. 

Mr.  Fitzgerald.  The  expenditures? 

Mr.  Norton.  Yes,  sir.  Just  as  soon  as  the  classification  of  the 
appropriation  bills  and  of  the  objects  of  expenditure  is  finished  we 
plan  to  lay  the  results  of  the  inquiry  before  the  appropriation  com- 
mittees in  Congress,  and  to  invite  your  cooperation  and  that  of  any 
of  the  appropriation  committees  of  Congress,  either  in  the  House 
or  the  Senate,  in  considering  this  question,  "How  can  we  best  throw 


the  searchlight  on  the  methods  of  the  Government  in  spending 
money  ?"  We  want  to  know  what  information  3' ou  desire  in  addition 
to  the  information  that  is  needed  by  the  administrative  heads. 
Furthermore,  we  want  you  to  help  us  decide  how  this  information 
may  best  be  presented  or  reported  to  make  it  most  readily  useful 
and  understandable.  We  are  trying  to  classify  the  objects  of  ex- 
penditure in  such  a  way  that  a  man  can  see  what  is  done  and  foUow 
any  class  of  items  or  any  particular  item  down  to  the  actual  article 
bought  and  the  expense  incurred  and  then  decide  whether  or  not 
it  was  intelligently  bought  or  intelligently  incurred.  We  assume 
that  this  is  absolutely  necessary  to  administration,  and  that  it  can 
not  help  but  be  useful  to  you  in  determining  how  much  you  desire  to 
appropriate. 

-  The  Chaikman.  One  result  of  that  investigation  then  will  be  to 
demonstrate  the  wisdom  of  the  proposition  of  concentrating  jurisdic- 
tion over  all  appropriations  in  one  committee,  will  it  not  ? 

Mr.  Norton,  Yes,  it  might  result  that  way. 

The  Chairman.  For  consideration,  and  keep  a  check  on  all  ap- 
propriations ? 

Mr.  Norton.  Yes,  sir.  We  have  no  intention  whatever  of  sug- 
gesting that  the  estimates  for  appropriations  shall  not  come  to  your 
committee,  or  any  committee,  in  the  present  form  in  which  you  now 
receive  them.  We  do  intend,  however,  to  show  each  year's  estimate 
reclassified  in  such  a  way  that  a  man  can  tell  how  much  the  Govern- 
ment has  spent  for  any  given  object,  such,  for  example,  as  forage,  and 
from  this  have  some  basis  for  estimating  what  will  be  needed  for  the 
next  year,  when  these  detail  estimates  are  stated  in  totals.  Further- 
more, we  mil  tell  you  explicitly  what  we  mean  by  ''forage,"  and 
what  is  meant  by  "subsistence,"  and  how  much  money  is  being 
spent  for  "forage"  or  "subsistence"  and  every  object  for  which 
the  Government  spends  money. 

The  A  to  Z  classification  is  the  most  intelligent  classification  that 
we  can  find.  An  enormous  amount  of  work  has  been  done  by  the 
committees  (working  overtime  far  into  the  night)  on  this  inquiry 
without  the  expenditure  of  much  money  thus  far,  but  the  time  is 
speedily  coming  when  we  must  spend  some  money. 

Mr.  Fitzgerald.  What  doing? 

Mr.  Norton.  Before  answering  that  question,  with  your  permis- 
sion, I  will  go  a  little  further.  In  order  to  judge  as  to  whether  an 
expenditure  for  travel,  or  forage,  or  printing  is  intelhgent  or  not,  the 
authorization  for  the  expenditure  must  be  a  document  that  is  a  clear, 
understandable  document,  and  so  we  have  a  committee  on  expend- 
iture documents. 

Mr.  Fitzgerald.  I  do  not  catch  the  meaning  of  that  ? 

Mr.  Norton.  By  expenditure  documents  I  mean  the  requisitions, 
proposals,  awards,  contracts,  purchase  orders,  invoices,  and  vouchers 
which  would  be  signed  by,  or  which  involve  responsibility  of,  any 
ofiicial  who  has  the  right  to  authorize  or  approve  the  spending  of 
money. 

The  Chairman.  That  is  what  you  mean  by  the  expenditure  docu- 
ments ? 

Mr.  Norton.  Yes,  sir.  We  find  that  there  is  for  example  an 
immense  variety  of  purchase  orders  and  requisition  forms  in  use  by 
the  Government.  Some  of  them  give  little  and  some  much  of  the 
information  necessary  to  intelligent  action  by  the  approving  officer, 


but  none  of  them  give  all  of  the  information  which  the  officer  should 
have  before  him  for  the  exercise  of  discretion  in  handling  the  busi- 
ness of  the  Government.  In  this,  as  in  the  estimates,  we  are  looking 
toward  a  constructive  plan  which  will  not  only  afford  the  basis  for 
intelligent  judgment  on  all  expenditures,  but  which  will  also  locate 
responsibihty  for  lack  of  intelhgence  or  due  regard  for  economy. 

Mr.  Fitzgerald.  You  can  not  tell  the  article  purchased  ? 

Mr.  Norton.  Generally  speaking,  no.  The  documents  do  not  now 
clearly  indicate  precisely  the  kind  and  grade  of  article  bought;  so 
that  neither  this  committee  nor  the  President  nor  any  administrative 
officer  can  form  an  intelligent  judgment  as  to  whether  economy  was 
practiced  or  not. 

Mr.  Fitzgerald.  The  description  in  the  voucher  does  not  enable 
you  to  tell  whether  the  price  paid 

Mr.  Norton  (interposing).  Was  a  fair  price  for  that  particular 
article  or  not.  We  are  anal^^zing  every  object  for  which  the  Gov- 
ernment spends  money,  classifying  and  codifying,  it  might  be  said 
cataloguing,  the  specifications  and  description  of  things  bought,  so 
that  by  use  of  a  short  code,  designation,  or  symbol,  in  addition  to 
the  name,  exact  reference  may  be  made  on  the  expenditure  docu- 
ment. The  purpose  is  to  enable  one  to  tell  exactly  what  the  person 
who  made  up  the  voucher  intended  to  describe  and  enable  the  auditor 
to  have  before  him  statements  by  the  receiver  of  the  goods  as  to 
exactly  what  was  received;  from  the  inspector  as  to  exactly  what  was 
inspected;  and  to  check  tliis  to  requisitions,  orders,  bids,  contracts, 
which  set  forth  exactly  what  was  to  have  been  delivered  and  what 
price  should  have  been  paid.  This  is  a  tremendous  task.  It  is 
being  done  by  these  committees,  the  members  of  which  are  now  in 
the  Governement  service,  picked  men,  some  of  the  very  best  men  in 
the  departments. 

The  Chairman.  It  is  proposed  to  adopt  some  uniform  form  of 
document  ? 

Mr.  Norton.  Yes;  so  far  as  uniformity  is  practicable. 

The  Chairman.  The  President  would  have  it  in  his  power  to 
adopt  a  regulation  of  that  kind  without  legislation  ? 

Mr.  Norton.  Yes,  sir;  I  think  so. 

Now,  then,  after  the  actual  completion  of  the  transaction,  the 
payment  of  the  money  and  the  auditing  of  the  voucher  must  be  con- 
sidered. At  the  present  time  it  is  fair  to  say  that  the  auditor  has 
before  him  so  little  information  that  is  exact;  the  documents  con- 
tain so  little  evidence  that  would  be  acceptable  to  a  court;  ana  the 
audit  on  a  given  transaction  takes  place  so  long  after  the  fact  that 
it  is  not  possible  to  audit  the  transaction  on  its  merits.  Indeed, 
our  present  auditing  system  does  not  look  into  the  merits  at  all. 
Proper  supporting  data  are  lacking,  and  so  much  time  elapses  before 
the  audit  takes  place  that  all  possibility  of  inspection  for  the  pur- 
pose of  obtaining  evidence  is  lost.  For  instance,  oats  bought  months 
before  have  been  consumed  and  they  can  not  be  seen.  The  pro- 
cedure relating  to  the  reporting  of  facts  after  inspection  of  the 
goods,  the  consideration  of  what  evidence  is  necessary  to  the  audit 
of  a  voucher,  what  procedure  is  to  be  followed  in  collecting  and 
authenticating  the  evidence  which  is  on  documents  which  the  auditor 
has  before  him,  no  one  of  these  has  been  thought  out  clearly,  nor  is 
there  any  uniformity  or  consistency  in  the  procedures  of  the  several 
divisions  of  the  service. 


s 

\  Mr.  Fitzgerald.  For  instance,  the  Army  purchases  oats  all  over 
the  United  States  and  in  the  Philippines  and  different  places.  Are 
you  developing  a  system  of  inspection  that  is  to  be  an  aid  to  the 
auditing  ? 

Mr.  ISlORTON.  Yes.  We  have  in  mind  developing  a  procedure 
which  will  make  inspection  eflfective  when  employed;  a  procedure 
which  will  have  for  its  purpose  throwing  around  the  audit  of  claims 
the  same  protection  which  a  court  throws  about  itself  in  considering 
a  case  before  it.  The  procedure  of  audit  should  be  as  well  defined  as 
the  law  of  evidence. 

Mr.  Smith.  Suppose  now  that  the  department  recklessly  makes  an 
exorbitant  contract  for  oats.  Suppose  that  it  turns  out  that  they 
have  been  buying  oats  at  Cincinnati  at  $2.40  a  hundred  and  shipping 
them  to  Des  Moines,  Iowa — oats  that  came  from  Des  Moines,  Iowa, 
originally,  the  Government  paying  the  freight  in  the  contract  price  to 
Cincinnati  and  paying  its  own  freight  back  to  Des  Moines,  where  oats 
grow  right  outside  the  corporate  limits,  and  it  is  paying  now  $2.40  a 
hundred  in  Cincinnati  when  the  oats  are  only  worth  $1.30.  To  what 
extent  has  an  auditor  anyhow  any  right  to  question  the  reasonable- 
ness of  that  contract  ? 

Mr.  Norton.  He  has  no  opportunity  under  the  present  auditing 
procedure  of  the  Government. 

We  have  in  mind  a  clear-cut  procedure  to  be  followed  in  col- 
lecting and  authenticating  the  evidence  on  documents  presented  for 
audit  so  that  the  auditor  may  disallow  such  a  claim  as  being  unreason- 
able and  unjust.  The  return  made  by  the  inspector  as  to  the  quality 
of  the  oats  would  be  only  one  of  the  facts  for  the  auditor's  considera- 
tion. The  procedure  would  require  that  each  person  who  had  any 
part  in  the  transaction  should  make  a  statement  over  his  own  signa- 
ture as  to  the  facts  within  liis  personal  knowledge,  and  nothing  else. 
It  would  be  for  the  auditor  to  determine  whether  the  evidence  was 
sufficient,  and  whether  the  claim  was  just  and  reasonable. 

Mr.  Smith.  Was  it  your  intention  not  only  to  devise  economies  in 
the  administration,  but  in  the  actual  commercial  transactions  of  the 
Government  outside  of  the  city  of  Washington  ? 

Mr.  Norton.  Yes,  sir.  Judge  Smith,  the  President's  inquiry  into 
economy  and  efficiency  has  nothing  more  to  do  with  administration 
than  you  have.  It  wants  nothing  more  to  do  with  administration 
than  do  you.  We  want  to  provide  the  machinery  by  which  the 
President  may  look  into  liis  administration,  so  to  speak,  as  the  head 
of  a  business  would  do;  we  want  to  throw  light  on  the  transactions 
so  that  he  can  form  an  accurate  judgment  as  to  whether  the  trans- 
actions were  well  or  ill  done.  He  is  responsible  for  every  act  of  every 
man  under  him;  he  is  entitled  to  have  the  means  whereby  he  may 
inform  himself  as  to  what  is  going  on ;  the  heads  of  departments,  as 
his  advisers,  are  equally  entitled  to  such  information.  Congress  is 
entitled  to  the  same  kind  of  information,  if  desired. 

Mr.  Smith.  What  is  going  to  be  the  good  of  it  ?  I  have  informa- 
tion— I  am  not  vouching  for  its  reliabiUty — that  the  quartermaster's 
branch  of  the  War  Department  has  now  a  contract,  the  vouchers 
under  which  are  going  through  the  auditor's  office,  to  buy  oats  at 
$2.40  a  hundred  at  Cincinnati,  worth  only  $1.30,  and  to  be  shipped 
back  to  Des  Moines,  Iowa,  where  they  were  grown. 
I  Mr.  Norton.  Allow  me  to  turn  your  question  around.  You  are 
appropriating  for  the  expenses  of  the  Government,  and  when  you 


hear  a  thing  of  that  sort  what  facihties  have  you  for  testing  the  accu- 
racy of  it  ? 

The  Chaieman.  To  call  the  officer  before  the  committee  and  ascer- 
tain whether  or  not  it  is  true. 

Mr.  Smith.  We  could  summon  both  the  Auditor  for  the  War 
Department  and  the  Quartermaster  General  and  have  them  produce 
the  papers. 

Mr.  Norton.  You  would  at  once  find  yourself  in  a  debate  with 
them  as  to  the  qtiality  of  the  oats — as  to  what  grade  they  were;  you 
would  find  that  the  record  of  the  transaction  on  the  vouchers  and 
supporting  papers  was  not  clear;  that  the  facts  were  not  stated  with 
such  exactness  that  you  could  get  at  the  merits  of  the  transaction 
without  great  difficulty,  if  at  all.  We  are  trying  to  provide  a  means 
whereby  you  might  have  this  information  reported  to  you  imme- 
diately, and  the  evidence  on  which  this  report  is  made  the  same  as 
would  be  produced  in  a  court,  or  before  you  on  subpoena.  This  is 
what  we  are  trying  to  do — to  work  a  procedure  out  with  a  view  to 
getting  clearness  and  exactness  of  statement  of  fact  either  in  sum- 
mary or  detail,  as  desired,  so  that  when  a  question  is  raised  as  to  a 
transaction  one  man  will  not  be  talking  of  one  thing  and  another  of 
another  thing.  We  assume  that  you  have  a  right  to  hold  the  adminis- 
tration responsible  for  a  clear  statement  of  facts  on  any  subject  of 
business;  and,  further,  that  the  heads  of  the  administration  are 
entitled  to  this  same  kind  of  information  currently  from  their  sub- 
ordinates. 

The  Chairman.  I  have  information  that  this  practice  referred  to  by 
Judge  Smith  is  not  confined  alone  to  the  purchase  of  oats,  but, to  other 
articles  purchased  by  the  War  Department,  where  there  is  a  double 
transportation  on  everything  that  is  bought.  If  your  investigations 
throw  any  light  on  transactions  of  that  kind,  then  it  is  your  purpose 
to  remedy  them  by  providing  a  system  that  would  make  it  impossible 
to  practice  anything  of  that  kind  in  the  future  ? 

Mr.  Norton.  Kather  to  make  it  impossible  for  such  practices  as  are 
suggested  to  exist,  without  the  fact  becoming  immediately  available 
to  those  who  are  responsible  for  administrative  direction  and  con- 
trol; and  to  enable  the  ofHcer  to  report  the  facts  to  you.  Oats  would 
be  included  in  the  general  class  "forage" ;  you  would  have  brought  to 
your  attention  the  fact  that  the  Government  spent, '  let  us  say, 
$4,500,000  for  forage  during  the  year  1910.  You  are  asked  for  an 
appropriation  covering  the  quartermaster's  estimated  expenditures; 
before  making  it  you  would  say:  "What  is  the  analysis  of  that  forage 
account  ?"  This  would  be  stated  to  you  by  classes  of  forage,  in  which 
might  appear,  say,  $1,000,000  for  oats;  supporting  this  you  might 
have  stated  the  kinds  of  oats,  the  price  per  hundred,  and  the  amount 
purchased  and  used  at  each  place  where  oats  were  obtained.  Instead 
of  being  interested  in  forage,  and  other  classes  of  purchases,  your  com- 
mittees may  be  so  organi?;ed  that  you  may  wish  to  inquire  into  the 
needs  of  each  department  and  to  consider  these  in  relation  to  what  has 
been  the  cost  of  operating  them  in  the  past. 

Take  the  War  Department,  for  example:  You  could  trace  its  cost 
of  operation,  maintenance,  construction,  work  performed,  etc.,  right 
straight  down  from  the  department  as  a  whole  to  each  division  of 
work,  and  there  again  resolve  these  total  costs  into  specific  things 
bought  and  prices  paid.  If  the  method  of  describing  oats  or  any 
other  thing  is  the  same  throughout  the  Government  service,  there  is  a 


10 

double  advantage:  (1)  There  would  be  no  confusion  as  to  what  is 
bought  by  each  branch;  (2)  comparisons  could  be  made  of  purchases 
in  the  War  Department  with  those  in  the  Department  of  Agriculture, 
or  any  other  department.  If  it  is  clearly  indicated  what  classes  of 
oats  were  bought,  if  this  is  shown  on  the  requisition,  on  the  purchase 
order,  on  the  invoice,  on  the  voucher,  you  are  then  in  a  position  to 
say,  "This  is  what  we  are  talking  about,  this  is  what  you  bought,  that 
is  what  you  say  you  paid  for  it,  these  are  the  vouchers  on  which  money 
has  been  paid,  and  now  what  have  you  to  say  about  it,  Mr.  Admin- 
istrator?" The  administrator  would  also  be  in  the  position  of  having 
this  same  information  available  to  him  each  day.  He  could  have  it 
in  time  to  direct  and  control  expenditures ;  he  would  have  it  in  time 
to  correct  any  wasteful  practices  that  might  exist,  and  then  when  he 
came  to  you  a  year  afterward  with  his  report  he  would  have  a  record 
of  accomplishment  to  lay  before  Congress.  The  difficulty  now  is  that 
the  administrator  himself  does  not  know,  and  when  you  go  into  a 
transaction  you  have  him  at  a  disadvantage;  moreover,  3^ou  your- 
selves are  at  a  disadvantage ;  the  method  of  recording  the  transaction 
itself  varies  so  much  in  the  various  departments  that  you  can  not 
understand  them;  you  find  that  you  are  talking  about  one  thing  and 
the  man  before  you  is  talking  about  another. 

You  have  no  common  language,  if  I  may  use  that  expression.  It 
is  a  long,  laborious  job  that  is  being  undertaken,  but  we  have  been 
forcing  this  work  as  much  as  possible,  and  so  far  with  only  a  smal 
expenditure  of  money,  by  using  the  department  people  as  much  as  we 
could.  The  use  of  the  department  committees  makes  them  keen  and 
intelligent  on  the  subject  of  economy  and  starts  them  to  looking  into 
their  own  methods  of  administration,  which,  after  all,  is  what  we  have 
been  driving  at.  We  are  coordinating  aU  this  effort  by  the  questions 
asked,  the  reports  requested,  the  conferences  held,  the  assistance  ren- 
dered by  a  professional  staff  of  experts  at  the  President's  office. 

Among  the  subjects  of  inquiry  mentioned  is  the  method  of  han- 
dfing  and  filing  correspondence.  We  find  that  different  methods  are 
employed  in  the  different  departments.  In  fact,  there  is  a  different 
method  found  in  practically  every  office  of  some  departments.  One 
method  is  naturally  less  expensive  and  more  effective  than  the  other. 
What  is  the  best  way  to  do  it  ?  We  have  a  committee  hard  at  work 
on  that  one  problem. 

Then,  of  course,  there  is  the  question  of  cost  accounting,  so  we  can 
get  accurate  knowledge  about  the  cost  of  making  a  battleship,  or  of 
making  a  census  report,  and,  if  desired,  the  cost  of  each  process. 

The  Chairman.  Can  you  state  what  the  Government  expends  for 
stationery  ? 

Mr.  Norton.  We  can  give  you  an  approximate  figure,  the  best  that 
is  now  at  hand — $1,796,642.94.  If  we  nad  the  proper  means  of  keep- 
ing this  information  before  the  administration  we  could  answer  this 
question  or  any  other  that  you  might  ask  accurately  and  imme- 
diately. 

The  Chairman.  Does  that  include  the  printing  on  the  stationery  ? 

Mr.  Norton.  No,  sir.  On  the  statement  which  I  have  before  me, 
printing  is  a  separate  item  of  several  times  that  amount  when  consid- 
ering the  work  done  by  the  Government  Printing  Office. 

The  Chairman.  That  includes  more  than  the  printing  of  the  sta- 
tionery ? 

Mr.  Norton.  Yes. 


11 

,    The  Chairman.  And  without  the  canal  expenses? 

Mr.  Norton.  They  are  excluded  from  the  statement  before  me. 

The  Chairman.,  Merely  the  salaries  in  the  executive  departments 
outside  of  the  Post  Office  Department  ? 

Mr.  Norton.  Yes,  sir;  exclusive  of  the  postal  service. 

The  Chairman.  Does  that  include  the  field  service  of  the  various 
departments  ? 

Mr.  Norton.  Yes,  sir.  It  includes  all  the  general  appropriation 
bills,  but  does  not  include  the  Panama  Canal  or  the  postal  service. 
We  have  arranged  that  information  by  the  departments,  and  then  we 
have  it  by  bureaus. 

The  Chairman.  The  investigation  you  are  now  engaged  in  is 
necessary,  as  I  understand  you,  to  intelligently  understand  the  present 
methods  of  administration  ? 

Mr.  Norton.  That  is  exactly  it.  So  that  they  may  be  improved  if 
possible. 

The  Chairman.  With  a  view  to  segregating  those  methods  where 
you  find  a  method  tends  either  to  inefficiency  or  extravagance  ? 

Mr.  Norton.  Exactly.  Let  me  take  an  illustration,  traveling 
expenses.  Suppose  we  find  that  one  of  the  bureaus  is  spending 
$1,500,000  for  traveling  expenses,  and  we  find,  furthermore,  that  there 
are  ten  or  fifteen  or  twenty  kinds  of  ways  in  which  traveling  expense 
money  can  be  spent — first-class  single-trip  tickets,  mileage,  round-trip 
tickets,  etc. — and  put  an  expert  at  work  and  he  finds  that  that  bureau, 
according  to  the  classification  established,  spent  only  $350,000  for 
mileage,  whereas  it  spent  $1,150,000  for  first-class  single-trip  tickets. 
In  the  first  place  if  the  vouchers  for  travel  are  properly  drawn  they 
might  show  this  in  a  very  simple  way,  by  the  code  number  and  brief 
description,  and  from  these  an  exact  analysis  of  the  way  the  money 
was  spent  might  be  obtained. 

From  the  analysis  and  the  questions  which  would  naturally  follow 
it  is  found  that  it  is  the  custom  of  the  department  to  issue  transpor- 
tation orders  to  the  railroad  to  issue  tickets,  which  orders  in  turn 
are  honored  and  settled  for  at  the  first-class  single- trip  rates.  This 
would  moan  that  the  department  spends,  say,  $10  for  a  ticket  to  New 
York  and  back,  $1  more  than  you  or  I  would  spend  by  the  use  of 
mileage  when  we  go  to  New  York  and  pay  for  it  ourselves.  We 
probably  buy  $50  or  $100  worth  of  such  transportation  where  the 
Government  buys  ten  or  fifteen  million  dollars  worth  and  pays  for 
such  a  trip  as  I  describe  10  per  cent  more  for  it  than  we  do.  If  there 
is  any  appreciable  portion  of  ten  or  fifteen  million  dollars  on  which 
1  per  cent,  2  per  cnt,  or  10  per  cent  may  be  saved,  this  is  an  item  of 
waste  for  which  an  administration  might  be  held  justly  responsible, 
and  an  amount  large  enough  to  engage  the  attention  of  Congress. 

Mr.  Fitzgerald.  Let  me  cite  an  illustration.  Certain  Army  offi- 
cers want  to  make  certain  inspections  and  they  went  by  automobile 
when  they  could  have  traveled  by  rail.  Would  that  show  up  under 
the  present  system  ? 

Mr.  Norton.  Under  the  present  system  it  would  not.  The  expen- 
diture document,  the  requisition  or  order — that  is,  the  paper  signed 
when  the  transaction  is  approved — usually  does  not  show  properly 
the  exact  nature  of  the  transaction,  and  therefore  no  mortal  man 
can  form  a  fair  judgment. 

The  Chairman.  As  to  whether  or  not  authorized  ? 


12 

Mr.  NoETON.  Whether  it  is  something  that  should  be  done,  or  is 
well  done. 

If  you  asked  the  head  of  any  department  whether  the  money 
expended  in  his  department  was  well  expended  his  answer  woul^ 
be,  "Yes,  we  believe  we  are  doing  it  as  well  as  it  can  be  done," and 
it  he  wished  to  show  that  it  was  he  would  not  be  able  to  do  so  until 
some  such  machinery  has  been  devised,  so  to  speak,  as  we  are  now 
workmg  on.  To  provide  a  method  of  doing  this  is  a  tremendous 
task,  as  I  have  indicated  to  you,  and  we  are  now  hard  at  work  devising 
such  a  method. 

I  have  not  spoken  of  all  the  work  we  are  on.  I  will  not  bore  you 
by  going  too  much  into  detail.  After  we  get  together  the  material 
necessary  to  enable  us  to  formulate  a  definite  constructive  program, 
one  that  is  consistent  and  will  enable  us  to  develop  methods  of 
uniform  practice,  then  we  must  bring  to  bear  upon  the  problem  the 
best  minds,  experts,  that  we  can  employ,  with  a  view  to  making 
available  to  those  who  are  now  m  the  service  the  advice  and  coopera- 
tion needed  to  place  the  business  of  the  Government  on  the  best  basis. 
Experts  are  needed,  first,  in  order  that  the  President  may  be  advised; 
second,  in  order  that  those  who  are  in  direct  contact  with  the  work 
may  have  the  benefit  of  the  contact  and  experience  of  those  who  are 
accustomed  to  dealing  professionally  with  problems  of  purchasing, 
inspecting,  auditing,  accounting,  reporting,  and  controlling  those 
various  functions  which  go  to  make  up  the  complex  activities  of  the 
Government. 

After  we  have  a  method  installed,  through  which  you  can  really  get 
a, ''look-in,"  you  can  turn  to  any  branch  of  the  service — the  Hydro- 
graphic  Office,  the  Weather  Bureau,  the  several  map  making  or 
printing  establishments,  and  what  not — and  pick  out  the  overlapping 
duplications  and  administrative  and  operative  functions,  the  expenses 
of  which  are  higher  than  they  should  he,  and  deal  with  such  problem 
intelligently  as  a  matter  of  legislation  and  appropriation.  Until 
this  laborious  task  is  finished,  it  will  be  impossible  for  a  committee 
|of  Congress,  for  the  President,  or  for  the  Secretary  of  a  department  to 
f  think  intelligently  on  the  subject  of  economy  and  efficiency.  What 
'we  are  aiming  at  is  to  give  to  Congress,  the  President,  and  other 
administrative  officers  exactly  what  the  board  of  directors  and  the 
head  of  every  large  business  has  or  should  have  before  them  when 
forming  judgment  whether  money  is  well  or  ill  spent. 

The  Chairman.  Is  it  not  your  purpose  at  the  present  time  to  pro- 
pose to  submit  estirnates  for  public  expenditure  in  any  form  other 
than  the  form  in  which  the  estimates  are  now  prepared,  which  esti- 
mates are  presented  in  accordance  with  law,  and  they  can  not  be 
presented  in  any  other  way  until  the  law  is  changed  ? 

Mr.  Norton.  No,  sir.  So  long  as  your  present  law  is  in  force  we 
shall  submit  estimates  in  the  present  form,  but  also  in  the  new  form, 
so  that  you  can  analyze  them,  and  if,  later  on,  you  gentlemen  in 
Congress  decide  that  you  wish  to  transfer  from  the  present  method 
of  making  estimates  for  appropriations  to  a  method  of  making  and 
submitting  estimates  which  you  may  by  that  time  understand  and 
like  better,  that  will  be  your  own  pleasure.  It  is  hoped,  however,  that 
you  may  provide  some  method  or  means  for  the  joint  consideration  of 
the  subject  of  forms  of  estimates  and  requests  for  appropriations. 

Mr.  Malby.  I  presume  there  are  various  employees  of  the  Gov- 
ernment at  the  present  time  who  are  allowed  a  certain  given  sum 


13 

per  diem  in  lieu  of  absolute  expenses.  Do  you  propose  to  cover 
those  ? 

The  Chairman.  I  think  what  Mr.  Malby  has  in  mind  is  that  in  the 
different  departments  there  are  a  great  many  men  in  the  field  service 
allowed  S3  per  day. 

Mr.  Smith.  In  lieu  of  subsistence,  not  in  lieu  of  traveling  expenses. 

Mr.  Malby.  No;  I  think  the  allowance  is  always  made  for  sub- 
sistence, exclusive  of  travel  expense.  You  do  not  have  any  infor- 
mation as  to  what  their  actual  expenses  are  ? 

Mr.  Norton.  It  will  be  a  question  of  judgment  whether  such  a 
practice  should  be  continued  after  the  facts  are  available  by  means  of 
which  you  can  compare  the  $3  a  day  man  with  the  expense  of  a  man 
who  does  not  have  $3  a  day  but  turns  in  his  actual  bills. 

Mr.  Malby.  I  wondered  whether  there  was  no  way  to 'get  at  their 
actual  expenses? 

Mr.  Norton.  We  want  to  have  the  exact  information  so  that  any 
question  that  is  asked  about  the  service  can  be  answered  promptly. 
Almost  no  administrative  officer  in  Washington  knows  to-day  how 
much  of  his  current  appropriation  he  has  expended  up  to  date. 

Mr.  Malby.  Is  any  effort  being  made  to  ascertain  whether  any 
departments  of  the  Government  have  a  surplus  of  officers  or  employees 
or  what  percentage  of  labor  one  employee  can  perform  over  another, 
so  that  you  may  be  able  to  formulate  a  basis  on  which  to  pay  per  unit 
for  services  ?     Is  that  scheme  contemplated  ? 

Mr.  Norton.  Not  at  the  present  time. 

The  Chairman.  So  far  as  there  is  a  surplus  of  employees  for  a  given 
amount  of  work,  I  think  that  would  be  exhibited  in  the  investigation. 

Mr.  Norton.  Oh,  decidedly;  but  to  compare  the  efficiency  of  one 
man  with  another,  that  is  a  step  that  we  have  not  yet  taken. 

Mr.  Malby.  I  have  it  in  mind  that  the  employees  who  are  paid 
precisely  the  same  salary  differ  greatly  in  efficiency,  and  some  may  be 
paid  in  excess  who  actually  perform  less  work. 

Mr.  Norton.  We  expect  ultimately  to  be  able  to  show  this. 

Mr.  Malby.  I  may  be  mistaken,  but  I  had  in  mind  that  one  of  the 
great  avenues  of  waste  in  the  Government  was  overemployment — 
that  is,  too  many  employees  and  inefficient  employees,  either  by  age 
or  other  incompetencies — and  if  that  could  be  covered  in  any  sub- 
stantial, effective  way  it  would  strike  me  that  it  would  result  in  quite 
a  saving  to  the  Government. 

Mr.  Norton.  Yes,  sir. 

The  Chairman.  Provided  you  could  enforce  a  reform  of  the 
methods. 

Mr.  Norton.  In  order  to  get  expenses  down  in  the  departments 
the  most  successful  appeal  that  could  be  made  is  to  the  material 
spirit  of  competition  and  pride  which  exists  in  the  mind  of  any  intel- 
ligent administrator.  If  you  are  able  to  say  to  the  head  of  a  bureau 
in  the  Department  of  Commerce  and  Labor  that  your  costs  for  such 
and  such  a  class  of  work  are  25  per  cent  less  than  the  costs  produced 
by  the  head  of  a  bureau  in  some  other  department  for  a  similar  class 
of  labor,  or  still  better  if  you  can  get  a  man  or  a  head  of  a  division  to 
work  against  his  own  record,  making  a  record  of  efficiency  the  basis 
for  promotion,  you  have  given  an  inducement  to  serve  the  Govern- 
ment well.  That  is  just  human  nature,  and  what  we  hope  to  do  is 
to  provide  such  machinery  that  that  fundamental,  homely  spirit  of 


14 

competition  and  self-interest  may  be  utilized  for  obtaining  the  best 
results. 

The  Chairman.  Mr.  Norton,  do  you  anticipate  that  you  will  have 
an  unexpended  balance  of  this  appropriation  at  the  end  of  this  fiscal 
year? 

Mr.  Norton.  Yes.  We  shall  be  able,  however,  to  use  a  large  staff 
of  men  on  the  great  mass  of  material  we  are  gathering  very  shortly. 

Mr.  Fitzgerald.  How  do  you  expect  to  spend  the  $90,000  ? 

Mr.  Norton.  We  shall  set  to  work  the  best  experts  we  can  find. 

Mr.  Fitzgerald  (interposing).  Make  contracts  with  accountants? 

Mr.  Norton.  No.  We  shall  probably  make  no  contracts  with 
firms  of  chartered  public  accountants,  but  employ  our  experts  indi- 
vidually. 

Mr.  Fitzgerald.  Are  you  familiar  with  the  arrangements  that  the 
Treasury  Department  made  with  A.  W.  Young  &  Co.,  of  Chicago? 

Mr,  Norton.  Yes ;  some  of  them. 

Mr.  Fitzgerald.  It  provided  that  they  should  be  paid  $36,000  for 
certain  work,  $20  a  day 

Mr.  Norton  (interposing).  We  do  not  plan  to  do  that.  We  shall 
employ  our  own  men  and  pay  them. 

Mr.  Fitzgerald.  It  was  based  on  a  payment  of  $20  a  day  for 
accountants  and  $12.50  a  day  for  junior  accountants,  with  $3  a  day 
for  subsistence.  They  brought  men  down  here  as  junior  accountants, 
paying  them  $20  a  week,  and  collected  $15.50  a  day.  Have  you  a 
scheme  like  that  ? 

Mr.  Norton.  No,  sir 

Mr.  Fitzgerald.  Can  you  tell  us  what  compensation  you  expect 
to  pay  the  experts  and  the  character  oi  the  service  which  will  be 
rendered  ? 

Mr.  Norton.  It  depends  on  the  character  of  the  work.  We  pay 
the  man  now  in  charge  for  the  days  he  actually  works,  at  the  rate 
of  $10,000  per  year.  So  far  we  have  not  used  his  entire  time.  Every 
day  he  works  he  is  paid  at  that  rate.  At  the  present  time  we  have 
two  expert  accountants  who  receive  $3,600  per  annum  each;  one  at 
$3,000;  one  at -$2,200;  one  at  $2,000;  one  law  clerk  at  $1,500;  and 
four  stenographers  at  $720  each. 

Mr.  Fitzgerald.  How  many  men  do  you  think  you  will  employ  ? 

Mr.  Norton.  I  think  we  should  have  right  away  a  regular  staff  of 
about  six  men  of  the  highest  order. 

Mr.  Fitzgerald.  At  what  compensation? 

Mr.  Norton.  I  should  hope  to  get  these  men  at  the  rate  of  about 
$6,000  a  year,  or  if  that  is  not  possible  at  $8,000  a  year,  and  pay 
them  for  the  time  actually  employed.  We  will  have  to  go  right  into 
the  competitive  market  and  compete  with  large  corporations  and 
firms  of  chartered  accountants,  engineers,  lawyers,  etc.  We  shall 
go  out  for  those  men  and  get  the  best  we  can.  That  is  the  reason  I 
have  been  so  slow  about  expending  the  money,  being  very  careful 
about  selecting  the  men.  I  think  that  from  $6,000  to  $8,000  a  year 
ought  to  get  the  men  we  need,  and  I  am  aiming  to  get  five  or  six 
men  at  that  rate  at  once.  These  would  be  men  in  charge.  They 
_will  direct  the  committee  work. 

We  want  one  man  who  is  ari  expert  efficiency  engineer,;  who 
will  be  able  to  go  into  Government  operations  where  engineering 
knowledge  is  required  and  give  intelligent  assistance  and  direction 
to  the  work  in  progress  of  this  kind.     We  want  a  man  as  expert 


15 

accountant.  We  need  a  law  expert  of  the  highest  class  to  help  to 
formulate  procedures  pertaining  to  audit;  prepare  documents  which 
will  have  character  as  evidence;  suggest  legislation  where  it  will  be 
required.  We  need  a  highly  trained  man  of  the  secretarial  type — 
some  man  who  would  give  his  entire  time,  arrange  the  meetings  and 
keep  the  thing  going,  and  who  is  also  intelligent  enough  to  lead  these 
departmental  committees  in  their  work.  In  addition  to  those 
men  we  need  a  great  many  clerks  temporarily  to  tabulate  the  returns 
we  get  from  the  inquiries  we  are  making  in  the  departments.  That 
is  temporary. 

Mr.  Fitzgerald  (interrupting).  How  long  do  you  think  it  will 
take  to  do  the  work  ? 

Mr.  Norton.  What  is  your  estimate,  Mr.  Cleveland  ? 

Mr.  Cleveland.  We  are  trying  to  get  the  underlying  expenditure 
documents  ready  to  install  on  July  1,  so  that  we  will  have  the  foun- 
dation laid  for  getting  information  currently  throughout  the  next 
fiscal  year.  In  order  to  do  that  intelligently,  we  will  have  to  put  on 
all  the  force  that  is  necessary  to  digest  and  analyze  the  rather  volu- 
minous reports  which  we  have  just  received. 

But  with  this  only  the  foundation  has  been  laid  in  evidence,  i.  e.,  in 
the  documents  of  expenditures,  as  primary  records  of  transactions. 
Then  it  will  be  necessary  to  install  records  by  means  of  which  this 
data  may  be  classified  and  stated  in  accounts,  so  that  the  results  may 
be  accurately  and  promptly  reported  to  the  administrator.  This  is 
essential  to  getting  the  information  before  him  and  enabling  him  to 
get  it  before  Congress. 

Mr.  Fitzgerald.  How  long  will  it  take  and  how  much  will  it  cost  ? 

Mr.  Norton.  It  is  impossible  to  say  just  how  long  it  will  take  or 
just  how  much  it  will  cost,  but,  in  my  judgment,  our  present  appro- 
priation will  carry  us  through  to  about  the  1st  of  September  next. 

The  Chairman.  Which  appropriation  ? 

Mr.  Norton.  The  one  we  already  have. 

The  Chairman.  To  the  1st  of  September? 

Mr.  Norton.  Yes,  sir. 

Mr.  Fitzgerald.  This  appropriation  is  available  until  the  1st  of 
July.  ,  The  estimate  is  to  appropriate  $100,000  for  the  next  two  years. 
Suppose  you  only  want  $50,000  for  the  next  year  ? 

Mr.  Norton.  We  shall  use  from  September  1  to  the  following  July 
1  possibly  the  full  $100,000  asked  for.  Our  expenses  will  increase 
rapidly  from  this  time  forward,  and  then  after  aoout  one  year  they 
will  taper  off. 

Mr.  Fitzgerald.  Are  there  no  men  in  the  Government  service 
quaUfied  to  do  any  of  the  work? 

Mr.  Norton.  Yes;  some  of  them  we  can  not  get.  We  are  using 
every  man  we  can  find  who  can  be  spared  from  his  work. 

Mr.  Fitzgerald.  Gen.  Crozier  submitted  to  the  committee  this 
year  reports  regarding  the  cost  of  certain  manufactures.  I  think 
you  should  be  able  to  send  the  committee  some  specific  information 
of  the  manner  in  which  this  money  is  to  be  spent. 

Mr.  Norton.  I  will  be  glad  to  submit  such  a  statement  to  the 
committee. 


16 

Statement  nwde  by  Mr.  Norton  showing  condition  of  appropriation  Feb.  1,  1911. 
Amount  of  appropriation $100,000.00 

„    ,      .  EXPENDED. 

TraTdfng'expenseV;.;: : :::::: ^^'  Sf- 11 

Office  supplies 97O  84 

7,  292.  89 

Outstanding  obligations  (estimated) 200  00  -'  '   ' •  ^^ 

Government  Printing  Office,  for  printing .'.'."."'.'         494^  24 

694. 24 

Balance  available  Feb.  1 92  012  87 

Estimated  cost  of  conducting  the  President's  inquiry  into  economy  and  efficimcu,  from 

Feb.  1  to  July  1,  1911. 

1.  Salaries  and  wages: 

a.  Expert  in  charge 4,166.67 

0.  Regular  staff —  ' 

6  experts 15,000.00 

10  accountants 12,  500.  00 

10  clerks...     6  250.00 

12  stenographers 4  533  33 

Total  regular  staff 49  '^m  no 

c.  Consulting  staff ::::::;::::;::.•;:.•  .•;   6:250.00 

a.  Keserve  for  expenses  of  experts  brought  into  consulting  relation. .      2, 083.  33 

2.  Furniture  and  fihng  equipment '  4ig  gy 

3.  Stationery,  printing,  reports,  tabulating,  tai3ulating 'machines,  aiid  dis- 

tribution of  committee  documents,  etc 10  416  67 

4.  Reserve  for  contingencies .]..[[[.][].  6  250  00 

Estimated  amount  which  will  be  needed  prior  to  July  1 67,  916.  67 

Estimated  unexpended  balance  which  the  committee  is  asked  to  reappro- 

pnate.     . .         24, 096. 20 

Estimate  for  1912 100,000.00 

In  submitting  the  foregoing  estimate  it  is  assumed  that  a  large  part 
of  the  work  necessary  to  accomphsliing  tlie  purposes  of  tlie  inquTry  will 
be  done  by  experts  and  other  employees  already  in  the  service  of  the 
departments.  To  inquire  into  the  present  methods  of  doing  business, 
and  to  make  such  changes  as  are  necessary  to  place  the  Government 
on  a  basis  of  economy  and  efficiency,  would  cost  manv  limes  the 
amount  of  the  appropriation  asked  for  if  this  were  to  be  done  by  per- 
sons outside  of  the  service;  besides,  if  the  work  were  done  princi])ally 
r^f\rt\l  by  those  not  in  the  service^thedisciplinary  result  of  having  the  work 
-donfi-bY  the  men  in  the  ranks  would  h'p.lnsf.  Tha'17^r-^rrr.;,^rr  estimate 
enables  the  President  to  get  behind  the  work  and  act  intelligently 
about  it:  further  than  this  it  helps  those  in  the  departments  who  are 
busy  with  their  regular  duties  to  get  in  touch  with  conditions  as  they 
actually  exist,  to  think  about  the  needs  of  the  Government  as  a  whole, 
and  to  have  the  benefit  of  the  best  professional  advice  obtainable! 
It  is  hoped  that  the  President  may  be  authorized  to  use  any  balance 
of  the  present  appropriation  that  may  be  unused,  July  1,  in  addition 
to  the  appropriation  asked  for,  i.  e.,  in  addition  to  the  §100,000 
requested  for  the  next  two  years. 

o 


FOURTEEN  DAY  USE 

RETURN  TO  DESK  FROM  WHICH  BORROWED 


This  book  is  due  on  the  last  date  stamped  below,  or 

on  the  date  to  which  renewed. 

Renewed  books  are  subject  to  immediate  recall. 


i3kV55Pl  /_ 

^^H  r' 

AUG  1  3  1955 

«PD  1  3  1Q^?;  ' 

17JUL^' 

IN  STACKS 

SEP?     1960 

REC'D  I.U 

SEP  3    I960 



LD  21-100Tn-2,'55 

(B139s22)lT6 

General  Library 

University  of  California 

Berkeley 

Fampniet 
Binder 

Gaylord  Bros.,  Inc. 

Stockton,  Calif. 
T.M.  Reg.  U.S.  Pat. Off. 


^5<^ 


i^'M 


f-y    /jIV^ 


M'72792 


l(. 


THE  UNIVERSITY  OF  CALIFORNIA  UBRARY 


